There is good news for those who buy cars and bikes in India. On Independence Day, PM Modi announced the new GST Reforms 2025 and now preparations are being made to implement it by Diwali. The government aims to make the tax system easier and give relief to common customers. The most will be benefited by those who want to buy small cars and entry-level bikes.

Will tax decrease on small cars?

• So far, small cars have 28% GST and 1-3% Cess. It contains cars of up to 1.2 liter engines and less than 4 meters in length. This is the reason why cars like Alto K10, WagonR, Swift, Baleno, Dzire, Tata Tiago, Tigor, Punch, Hyundai i10, i20 and Exter become expensive. After the new reform, they can be brought into 18% tax slab. That is, all these cars will become very cheap in the coming time.

Mid-size and big cars are also affected

• Mid-size cars and SUVs, which have an engine up to 1.5 liters, currently cost about 43% due to 28% GST and 15% Cess. According to reports, they can also be brought to the new 40% slab. If this happens, popular SUVs like Maruti Brezza, Tata Nexon, Kia Seltos, Sonet and Hyundai Creta will also get relief in prices of up to 3%.

Motorcycle buyers also benefit

• Please tell that this reform will bring relief not only for the car, but also for the bike buyers. Currently, 28% GST is taken on bikes up to 350cc, which is planned to reduce to 18%. After this change, entry-level and computer bikes like Hero Splendor, Honda Shine, Bajaj Pulsar and TVS Raider will become cheaper. At the same time, premium bikes with engine more than 350cc will be more tax on Royal Enfield 650cc, KTM and Harley Davidson.

Why is this change important?

• The number of two-wheeler buyers in India is more than cars and most of them buy entry-level bikes. In such a situation, if the government reduces tax on bikes and small cars up to 350cc, then it will directly benefit the customers and will also speed up the automobile market.

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